The British Business Bank has launched a £210m fund targeting small and medium-sized businesses in the South East of England, as the UK's development bank continues to roll out regional lending vehicles designed to address longstanding gaps in finance provision outside London.

The South East Investment Fund will provide loans of between £25,000 and £2m alongside equity investments of up to £5m, with the BBB appointing FSE Group to manage the debt finance element and Maven Capital Partners to oversee equity investments.

"The South East of England is home to some of the UK's most innovative technological and scientific businesses, and this fund will ensure that businesses have local access to the finance they need to grow, scale and expand," said David Hourican, incoming interim chief executive of the British Business Bank.

The fund covers Buckinghamshire, Oxfordshire, Berkshire, Hampshire, the Isle of Wight, Sussex, Surrey and Kent. Despite hosting 17 per cent of the UK's university spinout businesses — second only to London — the region received just five per cent of total UK equity investment by value last year, a disparity the BBB aims to address.

The vehicle has already made its first investment, providing a £250,000 loan to Basingstoke-based technology company Process Vision to support its international expansion.

The BBB said an East of England Investment Fund will follow later this month, continuing its programme to deliver targeted finance across every UK nation and region outside of the capital. For private credit managers operating in the UK lower mid-market, the BBB's regional funds represent both a complementary capital source and a signal of where government policy sees the most acute financing shortfalls.